While electronic transactions, such as credit card and debit card transactions, have continued to rise in popularity, 75% of all commercial payments are still conducted using printed checks. In addition, the overwhelming majority of printed checks are now created/generated using one or more computing systems, computing system applications, and a laser printer.
A significant problem facing any entity using printed checks is a check fraud. Currently, check fraud takes several forms and accounts for over $20 billion of criminal activity per year with a current annual growth rate of 25% per year. As a result, one in four businesses is a victim of fraud with an average loss of $50,000, and 45% of these cases involve check fraud. Small businesses are particularly vulnerable to check fraud with an estimated 30% of small businesses failing due to fraud of one form or another.
One form of check fraud involves the actual counterfeiting of checks, i.e., a perpetrator creating a fraudulent physical check that is designed to mimic/copy checks provided by financial institutions, such as banks and credit card companies, and/or provided by various financial management systems, such as computing system implemented small business and personal financial management systems. In these cases, once the counterfeit check has been created, the perpetrator can then fill in critical fields of the check, such the payee and amount fields, as desired and forge, or otherwise fraudulently obtain, authorization signatures.
In an attempt to prevent check counterfeiting, the vast majority of checks provided to businesses and individuals currently include one form or another of anti-counterfeiting check features such as a printed, and/or colored, check designs, images, and/or patterns that typically cover the entire surface of the check, including the various check fields such as the amount and payee fields. While these anti-counterfeiting check features often do make it difficult to create counterfeit checks, the introduction of printed, and/or colored, check designs, images, and/or patterns that cover the entire surface of the check opens other opportunities for check fraud, such as check forgery.
Check forgery is the second largest form of crime committed against consumers/small businesses after identity theft. Check forgery is defined as adding, removing, or altering check information in order to perpetuate fraud; as opposed to counterfeiting which, as discussed above, involves copying an original check to perpetuate check fraud.
For instance, the inclusion of anti-counterfeiting check features such as printed, and/or colored, check designs, images, and/or patterns that cover the entire surface of the check make it easier for perpetrators of check fraud to commit check forgery by tampering with critical fields of already generated checks, such as the payee and/or amount fields, without leaving readily visible telltale traces of their work.
As noted above, the vast majority of checks used today, particularly those used by businesses, are laser printed checks whereby the various fields of the check, including the critical fields such as payee and/or amount fields, are filled in/populated with desired characters/symbols using laser printers. Laser printers have been widely adopted for decades and represent a significant technological advance over inkjet printers in terms of cost, practicality, speed, and efficiency. As a result, over 80% of all checks generated by printers are now generated by laser printers.
Unlike ink jet technology, laser printers do not use liquid ink that, in terms of countering fraud, advantageously soaks into the check substrate. Instead, laser printers utilize toner which is a form of powdered ink that is applied to the surface of the check and adhered to the check surface using heat to literally melt the toner onto the surface of the check, but typically not into the check substrate surface. As a result, depending on the quality of the laser printer and the adhesion properties of the check, it can be relatively easy to remove the toner, i.e. the printed characters/symbols, from the surface of currently available checks generated with a laser printer.
As one example, current perpetrators of fraud will often obtain a check generated with a laser printer and then exploit the fact that the laser printer toner resides only on the surface of the check to remove the toner-based characters/symbols using one of several methods. These methods for removing toner, i.e., the printed characters, from the surface of currently available laser printer generated checks include, but are not limited to: using tape, or another adhesive material, to literally lift the toner from the surface of the check in selected critical regions/fields, such as the payee or amount fields; using one or more edged devices, such as a razor, to scratch the toner from the surface of the check in selected critical regions/fields; using a chemical wash, or treated fabric, to wipe away the toner from the surface of the check in selected fields; and various other more or less sophisticated methods for removing the toner from the surface of the check in selected critical regions/fields.
Once a perpetrator of check fraud has removed the toner, i.e., the printed characters/symbols, from the surface of selected fields of the laser printer generated check, the perpetrator is then free to substitute whatever characters/symbols desired and thereby effectively make the check out to whomever they like and/or for whatever amount they desire.
To counter toner removal, some makers of checks now provide checks that include special adhesion coatings, and/or toners that are chemically designed to better adhere to the check surface. However, these approaches have typically provided limited results that, at best, only make it harder to remove the toner but still result in toner based characters/symbols that can be removed from the check surface by even a semi-skilled perpetrator of check fraud.
Fortunately, in the course of perpetrating the toner removal form of check fraud described above, it is extremely difficult to remove the laser printer applied toner from the surface of a laser printer generated check without leaving small traces of either the toner, or other evidence of the tampering, such as light smudging of toner on the surface of the check, small portions of toner that are not completely removed, and/or slight damage to the surface region of the check where the toner has been removed. However, as noted above, in order to prevent the counterfeiting and/or forgery of checks, the vast majority of checks include intricate anti-counterfeiting patterns, designs, images, and/or colored surfaces and while these measures do help prevent check counterfeiting and/or forgery they also serve to mask the small traces of toner, and/or other evidence of tampering, resulting from the removal and replacement of toner-based characters. In short, the same intricate patterns, designs, images, and/or colored surfaces that make the check difficult to counterfeit also serve to camouflage the small traces of toner, and/or other subtle evidence of tampering, that results from the removal and replacement of toner-based characters/symbols. Consequently, using current laser printer generated checks it is relatively easy to remove and replace toner characters without leaving traces of the tampering that are readily noticeable in the anti-counterfeiting patterns, designs, images, or colors on the surface of the check.
As a result of the situation discussed above, check fraud, and particularly check fraud involving toner character removal and replacement, is difficult to detect and contributes significantly to the billions of dollars misappropriated each year by perpetrators of check fraud. What is needed is a method and system from providing tamper resistant checks that are difficult to counterfeit yet readily reveal evidence of tampering.